Global oil prices spiked on Monday after Iran suspended indirect communications with the United States. Tehran halted the dialogue in response to escalating Israeli military operations against Hezbollah in Lebanon.
West Texas Intermediate (WTI) futures jumped more than 7% to trade above $94 per barrel. Brent crude prices simultaneously rose past $95 per barrel.
Iran’s state-aligned media indicated that officials are considering a complete closure of the Strait of Hormuz. This waterway serves as a critical chokepoint for global energy exports.
The diplomatic breakdown reverses previous expectations for regional de-escalation. Traders have reintroduced a significant geopolitical risk premium to crude prices amid threats to key shipping routes.